Kim DotCom, MegaUpload's founder will likely have to wait next month for his extradition hearing to begin.
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All the build up to an extradition hearing in the MegaUpload case was supposed to culminate with a court fight today in New Zealand.

But all we get is another bail hearing involving Kim DotCom, MegaUpload's founder, according to U.S officials (Update"DotCom was released on bail). A spokesman for the U.S. Attorney's Office for the Eastern District of Virginia, told CNET that its lawyers have yet to file extradition paperwork with the New Zealand court and have until March 2 to do so. It's unclear how long after the paperwork is filed that extradition proceedings would take place. DotCom remains in police custody in Auckland.

The U.S. seeks to bring DotCom and three other MegaUpload leaders to the United States to stand trial for alleged criminal copyright violations, racketeering, and money laundering. Last month, New Zealand police raided DotCom's home and arrested him and three other MegaUpload managers. Authorities also seized millions in cash and property belonging to the four men. U.S. officials say this is the biggest Web piracy case ever brought.

Lawyers for the defendants say they are innocent. They argue that even if MegaUpload managers were guilty of what they're accused of, the copyright violations are not criminal offenses. The charges also wouldn't be enough to extradite DotCom from New Zealand, his attorneys have said.

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The government accuses MegaUpload, a cyberlocker service, of being a front for a huge piracy operation that cost copyright owners more than $500 million in damages. Late last week, U.S. officials filed more charges. There were more criminal copyright charges filed as well as a new allegation that the men committed wire fraud.

Some of the additional copyright charges stem from allegations that MegaUpload copied YouTube's video library in 2006. CNET reported last month that buried in the U.S. indictment against MegaUpload were e-mail communications between company managers about copying YouTube's entire video collection.

Nobody has disputed that many MegaUpload users stored pirated movies and TV shows in their cyberlockers, which were then accessed by other users. MegaUpload's decision makers have long argued that under the Digital Millennium Copyright Act, service providers aren't responsible for infringing acts committed by users. However, the e-mail conversations appear to show that MegaUpload's decision makers did upload pirated material. The DMCA doesn't protect service providers from direct copyright infringement.

In addition to the new charges, the government seemed interested in undermining MegaUpload's credibility.

When officials announced the additional charges against MegaUpload, U.S. officials also noted that they found evidence that the company's claims of 180 million registered users were false. They said that a search of the company's computer system turned up only 66.6 million users. Of that number only 5.86 million, or fewer than 9 percent, uploaded files.

That would indicate that more than 90 percent of the registered users had nothing of their own stored at MegaUpload to download. U.S. officials will likely assert that people visited the service to download unauthorized copies of movies, TV shows, music, video games and other media.

Ira Rothken, DotCom's U.S. lawyer and a long-time defender of Web sites accused of copyright violations, is unimpressed with the new charges and says they won't change one important fact.

"There is no secondary infringement or Grokster-type inducement liability under criminal law," Rothken told CNET. "This is at best a civil case and should be tried in civil court, without policemen and raids and asset seizures...At some point, somewhere, we [DotCom and the other defendants] will walk out of court and go for coffee. Some judge will take a look at this and they'll be free."

About the author

Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
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